Despite falling rates of inflation, a fresh study conducted by Industrial Relations News and the Chartered Institute of Personnel and Development (CIPD) suggests private sector employers are forecasting to raise average employee wages by over 4% in 2024. The challenge of employee recruitment and retention is prompting employers not just to reconsider pay scales but also to develop advanced policies, as outlined by CIPD Director, Mary Connaughton during IRN’s annual conference in Belfield.
“We are observing that salary increments are primarily focused on retaining employees and certainly surpassing the weakening inflation rate”, she stated. “Both competitive salaries and positive workplace policies are essential for employers to ensure the continued loyalty of their workforce.”
In the survey involving about 200 employers, with 80% in the service industry, it appears that the majority of businesses are planning to offer pay increases beyond their initial expectations due to the ongoing constraints within the job market. Overall, the anticipated average salary increase across 2024 is expected to be 4.11%. Smaller firms, with less than 50 employees, are preparing to offer slightly more salary increase than larger corporations, yet the variance is minor.
Moreover, progressive policies are being frequently introduced. “We see businesses focusing on enhancing their culture and addressing gender pay disparity. It reflects the gravity of these matters and the significance of aligning with employee anticipations in the present context,” commented Ms. Connaughton.
The survey, coinciding with the impending translation of the EU’s Adequate Minimum Wages directive into Irish law this November, included questions around collective bargaining attitudes. It found that a mere 1% of union-free organisations are willing to embark on collective bargaining, while 73% are resistant to the idea.
Maeve McElwee of Ibec noted several forums already for positive discourse between employer and employee representatives on policy and industrial relation matters, and many businesses appreciating the value of trade unions dealing with pay and conditions. However, she also recognised that numerous local and multinational companies have established strong direct communication models, which should not be compromised.
Brendan McGinty, previously affiliated with Ibec and currently the managing partner at Stratis Consulting, expressed his awareness of the increasing frustrations amongst multinational corporations. His comments reflected the sentiment that companies offering fair terms and conditions, competitive pay scales, and excellent workplaces are facing potential exposure to additional rights, which might force them to interact with trade unions, despite no prior relationship.
While acknowledging this resistance, he warned trade unions not to be startled by the pushback. Greg Ennis, deputy general secretary of Siptu, countered this by stating that many employees are currently lacking the trade union representation they desire.
Ennis argued that the proposed directive would mandate the government to significantly boost collective bargaining levels, which he touted as the sole method for equitably dispersing profits generated by the workforce. He voiced his belief that more expansive collective bargaining coverage should come through representation by independent trade unions.
The forum also included Tom Hayes, who once held a trade union position in Ireland but has now transitioned to serve as executive director with Beerg, a Brussels-based employee relations consultancy that provides advice to many prominent multinationals.
Hayes highlighted that businesses must acclimatise to forthcoming legislation requiring increased employee engagement. He also expressed skepticism about the notion that the Minimum Wage Directive’s impact would substantially alter businesses, proposing that major corporations would quickly adjust to any new demands and that trade unions wouldn’t significantly boost actual representation levels.
He predicted, “The upcoming legislation will introduce some changes at the peripheries, but it’s unlikely they’ll alter the long-term sociological trends.”
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